Basmati Production Jumps to 13 Million Tonnes, But Prices Reach Rs 50 per Kg

India's basmati paddy production has seen an increase from 11 million tonnes in the 2022-23 season to 13 million tonnes this year. Despite this rise in output, prices for the premium grain have escalated, both for millers and consumers. The average purchase price of paddy has climbed from around Rs 46 per kg to Rs 50 per kg, reflecting higher earnings for farmers as well. This increase in price is largely attributed to robust export demand and the expanding domestic market for basmati rice. In the 2022-23 season, India exported 4.56 million tonnes of basmati rice, and the export figures for April to November 2023 showed a 9.6% increase compared to the same period in the previous year. 

The domestic market for basmati rice, estimated to be around 2.7 to 3 million tonnes, is experiencing growth, especially in non-traditional basmati consuming regions and non-metro cities. This growth trend is accompanied by a shift in consumer preference, with more people moving from non-basmati to basmati rice and from loose, non-branded to packaged, branded rice. As a result, the retail price of branded basmati rice has risen from Rs 80 to Rs 90 per kg over the last year. In contrast, the price of regular non-basmati rice has also increased from Rs 35 to Rs 40 per kg, despite export restrictions, primarily due to a reduced non-basmati crop yield caused by subnormal monsoon rains.

The basmati rice market comprises various segments, including domestic in-home consumption and institutional usage, with a notable portion of the market consisting of head rice. The rice milling industry in India plays a crucial role in this sector, with extensive facilities for paddy and rice processing, including by-products like bran and husk. The industry caters to all segments of basmati rice, including white, steamed, parboiled, head, and broken rice, aiming to encourage a shift from unbranded to branded rice products among consumers.